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The role of marketing is changing. The role of the marketing professional, too, is changing as a result. But what exactly are those changes, and what is their impact on players in the industry?
Decreasing budgets is, in fact, a main talking point. According to recent findings by Gartner’s CMO Spend Survey 2017-2018, marketing budgets have gone down from 12.1% of company revenue in 2016 to 11.3% in 2017. This is a challenge for marketing leaders worldwide, as it requires them to work with fewer financial resources while showing ever-improving results.
“As CMOs survey the landscape, one thing is clear — previous budget increases have come with weighty expectations, some of which have yet to be met,”
Research Director, Gartner for Marketers.
The fact of the matter is that, because marketing is changing on a regular basis – largely due to advancements in technology – professionals have to be quick to adapt.
For the time being, CMOs are more likely to focus their budgets on existing customers and proven practices, rather than on pursuing and acquiring new leads. Many of them, in fact, spend twice as much on customer retention than on customer acquisition, according to the report.
Surely, if keeping those customers is in line with their company’s long-term strategy, then focusing their efforts on that is by all means justified. What isn’t justified, however, is playing it safe because of a fear to test new waters. Marketing has become way too competitive for companies to simply sit around and wait. They need to be proactive, not reactive.
Together with the overall size of marketing budgets, spending on martech, too, has decreased over the past year. It accounted for 22% of marketing budgets in 2017 as opposed to 27% the year before, according to the Gartner report. There is no specific reason for this decline, but it may have to do with marketers’ struggle to completely understand the new technologies available to them.
Still, one trend seems to prevail: The need for marketing analytics tools.
While martech spend may have decreased, marketing analytics gets the largest share of marketing budgets at 9.2%.
For 2017-18, marketing analytics jumps ahead to the no. 1 area of spending compared with 2016-17, when it came in at no. 4 behind the company’s website, digital commerce and digital advertising.”
Consultant, Gartner for Markets
This is an important development as CMOs now clearly understand the need for advanced and automated marketing data tools.
Consequently, the focus on all-round marketing analytics technologies will be greater than ever. With increasing amounts of data being generated by companies on a daily – if not hourly – basis, having an automated tool to help transform and process this data will be key to remaining competitive.
According to Gartner’s report, close to a quarter of CMOs understand the need to stay on top of new marketing technologies. The growing number of companies choosing to adopt an annual innovation budget is a clear indication of this. Critically, the primary challenge facing CMOs is to be able to use their budgets effectively; harnessing the technology available to them and pursuing strategies that will support them in realising their long-term business goals.
As a marketer yourself, how do you spend your marketing budget? Feel free to share your experience in the comments below.